All posts tagged Steven Rattner

Ron Bloom, the former union official and banker turned chief auto adviser for the Obama administration, is in the running for a new position overseeing the White House’s manufacturing policy, reported Deal Journal colleague Jonathan Weisman.

The line on Bloom is that he’s a scrappy negotiator who has described his approach to restructurings as “dentist-chair bargaining.” (We don’t know exactly what that means, but it sounds tough.) In a sign of his bluntness, his voicemail greeting simply blurts out, “Hi, it’s Ron, you know the drill,” the Journal has reported.

Part of the impetus for creating a new role, Weisman wrote, is to unify the currently scattered array of officials from the U.S. Treasury to the Labor department who are responsible for manufacturing. The new manufacturing czar is expected to be tasked with boosting U.S. manufacturing and exports through policies on trade, taxes, infrastructure, education and other policy areas.

Bloom has an unusual resume for a job in Washington, or anywhere else for that matter. Here are highlights from Bloom’s career in and out of Washington:

After he graduated from Wesleyan University, Bloom worked for the Service Employees International Union and then got an M.B.A. at Harvard Business School….

Steven Rattner, the financier and former White House car czar, has agreed to pay $10 million to the state of New York as part of a settlement of a bitterly fought lawsuit filed by Attorney General Andrew Cuomo.

Cuomo, soon to be the governor of New York, last month sued Rattner alleging he paid kickbacks to obtain $150 million in pension-fund investments for Quadrangle Group, the private-equity firm co-founded by Rattner

In a news release today, Cuomo’s office said the $10 million is a “restitution to the State of New York.” Rattner also will be “banned from appearing in any capacity before any public pension fund within the State of New York for five years.”…

So Quadrangle is trying to put on a happy (new) face. Quadrangle is shutting all its offices except in New York, and now will be led by Michael Huber and Peter Ezersky, reports Deal Journal emeritus Michael Corkery.

Corkery reported Quadrangle has continued to earn profit from its investments, many of which are concentrated in cable and wireless companies. The firm’s two large funds were up 39% and 18%, respectively, in the third quarter from a year ago, according to a letter from Quadrangle to its investors.

Steven Rattner is in good company. The SEC also thinks Andrew Cuomo doesn’t play well with others.

In a report to Congress that dealt in part with the SEC’s handling of its investigation and lawsuit into the Bank of America-Merrill Lynch merger, the agency’s inspector general returned to a familiar theme: Tensions between the SEC and the office of New York Attorney General Andrew Cuomo.

“SEC lawyers expressed the view that, although the NYAG provided some cooperation with the SEC during the BofA investigation, the NYAG failed to cooperate fully. According to SEC attorneys, the NYAG refused to share information and to provide certain witness transcripts requested by the SEC prior to the SEC’s first and second proposed settlements….

The NYAG’s refusal to produce witness transcripts to the SEC meant that the SEC did not obtain testimony for certain witnesses. Because the Court had limited the number of depositions the SEC could take, the SEC could not always remedy the NYAG’s refusal to produce transcripts by deposing the same witnesses. Consequently, in making its charging decisions, there were certain witnesses whose testimony the SEC was not able to obtain”…

“I was perfectly prepared to reach a reasonable settlement as I did with the SEC. But I’m not going to be bullied by Andrew Cuomo, and I’m not going to agree to something that I don’t believe is fair with all things taken into account,” Rattner said in the interview, according to a transcript. “The SEC looked at facts and came to a set of conclusions. Andrew Cuomo chose instead to rely on his emotions.”

The Attorney General’s office did not immediately comment. The office said last week that “Mr. Rattner now has a lot to say as he spins his friends in the press, but when he was questioned under oath about his pension fund dealings he was much less talkative..”

Cuomo’s lawsuits are seeking $26 million from Rattner, and seeking to bar him for life from the securities business in New York state. Rattner last week settled a parallel but separate probe by the SEC.

At one point Rattner using the “E” word – extortion – to apply to Cuomo. Rose asks him to clarify :

Private-equity firms are like sharks. If a shark stops swimming, it will die. If PE firms stop raising money, they’ve got at least one foot in the grave.

Bad news, then, for Quadrangle Group, which has stopped looking for new investors amid hangovers from the pension-fund kickback charges that snared its co-founder, Deal Journal emeritus Michael Corkery is reporting.

Quadrangle largely had invested the $2 billion it raised in 2005, and the firm had been expected to raise a new slug of money. Guess not.

Two of the firms executives also are scooting along. Joshua Steiner, a managing principal, will take on a “transitional role” at the firm, Corkery reported. Another principal, Andrew Frey, also is planning to leave.

In a little noticed twist in the Steven Rattner legal fracas, the case has roped in Haim Saban, the idiosyncratic billionaire, owner of the Power Rangers characters, and a big mover and shaker in Democratic circles.

Rattner, the Quadrangle Group co-founder and former White House car czar, was accused Thursday of paying kickbacks to land pension fund investments for Quadrangle. Among the kickbacks, according to claims from the New York attorney general, were $50,000 in campaign donations in May 2006 to former New York Comptroller Alan Hevesi, through an unidentified party. Deal Journal colleagues Michael Corkery and Michael Rothfeld reported the only contributions of those amounts at the time came from Saban and his wife.

Of course, there’s nothing wrong with giving political donations, and there are no indications Saban has nothing anything wrong. Saban did not respond to questions from the Journal.

First, New York Attorney General Andrew Cuomo interrupted Rattner’s morning by slapping the Quadrangle Group co-founder with a lawsuit in a pension-fund kickback probe. That turned sour a day that should have been Rattner’s chance to take a victory lap, as the former White House car czar celebrated the IPO of General Motors.

The attorney general says Rattner influenced Quadrangle to pay kickbacks to land $150 million in investment money from the New York State Common Retirement Fund, a pension system for the state and many local government employees….

The kickback claims against Rattner fall into three major buckets: [MORE]

The lawsuits, part of a long-running probe involving New York state pension assets, alleges Rattner paid kickbacks to obtain $150 million in investments for Quadrangle from the New York State Common Retirement System.

The charges come at an awkward time for Rattner. He’s been on tour promoting his book, “Overhaul,” about the rescue of the U.S. auto industry. And he’s been interviewed many times in recent days about the GM IPO.

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Dealpolitik is Ronald Barusch's strategic look at deals currently making the headlines as well as the major forces at work in the deal-making world. He was a M&A lawyer with Skadden, Arps, Slate, Meagher & Flom for over 30 years. He retired in 2010 after 25 years as a partner at the firm. Click here for his current and archived columns.

David Petraeus, the former director of the Central Intelligence Agency and a retired military general, has signed court papers indicating he will plead guilty to a misdemeanor charge of mishandling classified information in exchange for a prosecutor’s recommendation he serve no jail time.